BUSINESS-TO-BUSINESS MARKETING

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BUSINESS-TO-BUSINESS MARKETING
CHAPTER12

• 12-1 Business-to-Business Exchanges
• 12-2 Making Business Purchase Decisions
• 12-3 Business Purchasing Procedures
• 12-4 Retail Purchasing

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• Focus Questions
• After reviewing the advertisement, what types of
  products do you believe Norilsk Nickel sells?
• Who might be some of its customers?
• Why would a company that sells to other
  businesses benefit from advertising?
• If you were a business customer, would the ad
  interest you in Norilsk Nickel? Why or why not?

COURTESY, NORILSK NICKEL
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BUSINESS-TO-BUSINESS EXCHANGES
12-1

• GOALS
• Explain the reasons businesses buy things from
  other businesses.
• Define the five major classifications of business
  consumers.
• Describe the common characteristics typical of
  business markets.

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Reasons for Business Purchases

• Reasons for purchasing
• Purchase products to be incorporated into a
  production or manufacturing process
• Purchase products for direct resale to other
  customers
• Purchase products to operate a business
• Purchasing as a marketing activity

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Categories of the Business Product Classification
System
Capital Goods The building and major equipment of business
Operating Equipment Equipment used in the daily operation of the business
Supplies Consumable materials used in the operation of the business
Raw Materials Unprocessed materials that are incorporated into the products by the business
Component Parts Partially or completely processed items that become a part of the products produced by the business
Services Tasks performed in the operation of the business or to support the production, sale, or maintenance of the businesss products and services
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Types of Business Purchasers

• Business Customer Classifications
• Producers
• Resellers
• Service businesses
• Government
• Nonprofit organizations

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Characteristics of Business Markets

• Derived demand
• Purchase volume
• Similar purchases
• Number of businesses
• Buyer/seller relationship

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MAKING BUSINESSPURCHASE DECISIONS
12-2

• GOALS
• Describe how businesses make new purchase,
  modified purchase, and repeat purchase decisions.
• Explain the roles played by purchasing
  specialists.
• Identify issues that often arise in international
  purchasing.

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The Buying Decision

• Make or buy
• Types of purchases
• New purchase
• Modified purchase
• Repeat purchase

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Purchasing Requires Specialists

• Buyer
• Product manager
• Merchandise manager
• Purchasing agent

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International Purchasing

• Supplier qualifications
• Pricing considerations
• Reciprocal trading
• Financing
• Transportation

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BUSINESS PURCHASING PROCEDURES
12-3

• GOALS
• Identify the steps in the business purchasing
  process.
• Explain why purchasing decisions need to take
  into consideration more than just the direct cost
  of products and services.
• Describe the importance of keeping accurate
  inventory and purchasing records.

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Steps in the Purchasing Process

• Identify needs
• Determine alternatives
• Search for vendors
• Select appropriate a vendor
• Negotiate a purchase
• Make a decision
• Evaluate the purchase

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Purchasing by Final Consumers and Business
Consumers

• Final Consumers
• 1. Identify needs
• 2. Gather information
• 3. Evaluate alternatives
• 4. Make purchase decision
• 5. Evaluate decision

• Business Consumers
• 1. Identify purchasing needs
• 2. Determine alternatives
• 3. Search for vendors
• 4. Select appropriate vendors
• 5. Negotiate a purchase
• 6. Make purchase decision
• 7. Evaluate purchase

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Improving Purchasing Procedures

• Improved performance
• Supply chain management
• Just-in-time
• Total quality management (TQM)

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Processing Purchases

• Inventory Records
• Inventory
• Physical inventory
• Perpetual inventory

• Purchasing Records
• Purchase order
• Packing list
• Invoice
• Receiving record
• Inventory records

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RETAIL PURCHASING
12-4

• GOALS
• Describe how retailers identify customer needs
  and how to satisfy them.
• Identify the ways retailers locate the products
  they need to satisfy their customers.

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Planning to SatisfyCustomer Needs

• Determining customer needs
• Tracking product sales
• Developing a purchasing plan
• Merchandise plan
• Basic stock list
• Model stock list

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Obtaining the Needed Products

• Selling to retail businesses
• Salespeople
• Manufacturer showrooms
• Trade shows
• Catalogs and web sites
• Completing the purchase process
• Determine source of supply
• Place order
• Ship and receive